Microsoft ups ante in VMware price war

Claims VMware cloud is up to sixteen times more expensive.

Microsoft, after recently whittling down its licensing options, is once again talking about how its private cloud infrastructure is cheaper than VMware's. Only this time, the cost advantages it claims are even more pronounced.

In a whitepaper released in January, Microsoft said VMware's private cloud solution is five to sixteen times more expensive than a comparable Microsoft private cloud, factored over a one to three year period. That's up from last August, when Microsoft estimated that VMware's private cloud was four to nearly ten times more expensive.

Microsoft said the additional cost savings stem from VMware's use of per-virtual machine and memory-based licensing for its private cloud products. For example, the Enterprise Plus edition vCenter Operations Management Suite costs $US34,250 for a pack of 25 VM licenses, Microsoft said in the whitepaper.

Microsoft said because its licensing scheme pegs costs to the number of processors, and doesn't set virtualisation limits on customers that buy the Datacentre versions of its private cloud products, it is easier for customers to understand and work with.

Another advantage Microsoft claims is that customers can buy all its public cloud building blocks -- Windows Server, System Center and Forefront Client Security -- together in a single per-processor software license, called ECI (Enrollment for Core Infrastructure). VMware's private cloud products must be purchased separately, though VMware has said it is looking at offering the channel a single cloud infrastructure license.

Microsoft in January got rid of its Enterprise ECI option and now offers Standard and Datacentre ersions, the latter of which comes with unlimited virtualisation rights. Microsoft uses the same licensing approach for System Centrr 2012, which is currently a release candidate and is slated for release in the first half of the year.

By Microsoft's calculation, VMware's private cloud costs up to $4730 per VM, including a 3-year license and support contract. However, nowhere in the whitepaper does Microsoft offer a corresponding figure for the cost of purchasing an ECI private cloud.

Microsoft, in the whitepaper, said building a VMware private cloud that is comparable to ECI would require components from vSphere 5, vCenter Site Recovery Manager, vShield Security and vCloud Director -- products known collectively as the VMware Cloud Infrastructure Suite.

There are, of course, differing interpretations in the industry as to exactly constitutes a private cloud, and that leaves vendors room for interpretation. Steve Kaplan, a virtualization industry analyst, said Microsoft's private cloud cost calculation is a "very tilted apples-to-oranges comparison" that does not account for VMware's breadth of functionality.

Kaplan also takes issue with Microsoft's wielding of per-processor licensing as an advantage over VMware's licensing. Based on what Microsoft considers to be a private cloud, a VMware-based private cloud will effectively have processor-based pricing, just as Microsoft's solution does, because a comparable cloud can be built with just vSphere and vCenter, he said.

"vSphere customers will seldom encounter costs for extra vRAM, as VMware's vRAM entitlements are pretty large, Kaplan said. "VMware's cluster-wide pooling of vRAM also avoids the need for extra licenses for the few hosts that have extremely large physical RAM installed."

Microsoft is also including extra VMware consumption-based pricing based products in its private cloud analysis, like Site Recovery Manager and vCenter Operations, in order to inflate VMware's costs, Kaplan said.

VMware products tend to be more expensive, but, Kaplan said, they also offer a broader range of features and functionality.

"The greater density of VMware VMs per processor means that as a private cloud grows, Microsoft's private cloud solution requires more servers and associated infrastructure costs," Kaplan said. "Additionally, the cost of System Center continues to go up as the private cloud scales."

Microsoft has been making these cost arguments for years, but it hasn't yet provided hard data on the market share it's taking from VMware in server virtualisation, and so it's unclear if this latest round of data will map to a corresponding customer migration.